By Joel Hall
A new Internal Revenue Service commissioner, an upcoming presidential election, and a depressed economy have created uncertainly among many business owners.
On Monday, the Clayton County Chamber of Commerce hosted a panel to help business owners prepare themselves and their employees for the future through preparation and organization.
"Keeping money in your pocket and not Uncle Sam's: Planning strategies for the 2008 tax year," was the subject of the chamber's July Business to Business Luncheon.
John Kozak, a partner with Fulton & Kozak, CPA, and one of the guest panelists, said with the recent installment of Douglas Shulman as Commissioner of the Internal Revenue Service, he expects the office to focus on "compliance" rather than "services."
"I think we are going to see a more aggressive IRS under his tenure," said Kozak. He said organization will be key this year for businesses seeking to claim tax deductions.
"I see more people lose deductions, not because they didn't know about it, it was because they forgot about it," said Kozak. "I think there is a lot of savings in being more efficient."
Kozak said rather than filing receipts and records by subject, they should be filed by the month; that way "you're only going to have 12 folders." He added that it is vital for businesses which use vehicles to keep a mileage log, because "it is one of the things the IRS harps on" when determining tax deductions.
Tania Pellew, a financial advisor with Smith Barney, focused on retirement planning, and said that in today's economy, providing an attractive retirement plan is a way to "attract talent" to a business.
"The days of the gold watch and the pension plan are gone," said Pellew. "We're in an environment when employees are responsible for their own retirement."
By not having a retirement plan, businesses "are missing out on attracting quality talent."
Pellew said having a thoughtful retirement plan in place can save employers and employees money, because money in a retirement savings plan is not taxed by the government until you withdraw it.
"A retirement plan is the only tax deduction you get to keep," said Pellew. "This is money that you are not paying taxes on. When you take it out, you are paying taxes on it."
Michele Norman, a vice president and financial advisor with Heritage Bank, said that employees and employers must prepare for the fact that people are living longer these days.
"Our grandparents, parents, and we are not prepared to spend 25 to 30 years in retirement," said Michele Norman. "Our parents are living until 100 and they are needing their money. Whatever you do, you want to put away as much money as you can.
"Some people are so afraid of the IRS that they don't take advantage of some programs that may help them," Norman added. "Education is power."